Notification on material event
Regarding the amendment of procedure description for determining the mandatory supply volume for the LNG terminal
AB “Ignitis grupė” (hereinafter – Ignitis Group or the Company) informs that on 30 December 2020 the Government of the Republic of Lithuania (hereinafter – the Government) made a resolution to amend the Government Resolution of 7 November 2012 No 1354 ‘On the Order of Natural Gas supply diversification approval’ (hereinafter – the Resolution).
The Resolution determined the mandatory supply volume of 3,867,500,000 kWh (±5 per cent) for the liquefied natural gas (hereinafter – LNG) terminal for 2021, which equates to the currently effective mandatory LNG supply volume, ie four standard size LNG shipments. The role of designated supplier of LNG is performed by UAB “Ignitis”, a subsidiary of Ignitis Group.
The Resolution also specified the procedure for determining the mandatory supply volume for the LNG terminal and determined that the mandatory supply volume for the LNG terminal may be adjusted during the current year. Also, the decision was made that the mandatory supply for the LNG terminal will be coordinated in the future with all parties of interest according to the procedure established in the Resolution, including the National Energy Regulatory Council and the designated supplier – UAB “Ignitis”.
Following this decision of the Government, the previous Resolution amendment project of the Ministry of Energy of the Republic of Lithuania submitted to the Government and which suggested that the number of annual standard LNG shipments be reduced from four to two in 2021 and about which The Company announced on 9 December 2020 in a notice regarding the designated supply activities of liquefied natural gas (link), is no longer relevant.
Also, the Resolution amendment project of the Ministry of Energy of the Republic of Lithuania submitted to the Government at the beginning of December 2020 on the Paragraph 11 of the Law on Liquefied Natural Gas (hereinafter – LLNG) No XI-2053, with the intention to regulate that, starting from 1 January 2021, the reasonable designated supplier’s costs will tantamount to not more than 10 per cent price difference between the price paid of the designated supplier for the mandatory supply volume for the LNG terminal and the average price of imported liquefied natural gas to Republic of Lithuania, was returned to the Ministry of Energy of the Republic of Lithuania.
The aforementioned LLNG amendment project was not submitted before the Government, and the Ministry of Energy of the Republic of Lithuania may suggest to amend the LLNG to the Government only after the additional analysis of cost reducing alternatives for mandatory supply activities for the LNG terminal is performed, which is estimated to be completed by 31 March 2021.
For more information please contact:
Artūras Ketlerius, Head of Public Relations
Tel. +370 620 76076